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Loan Payment Calculator

Compute monthly payment, total interest, and total paid for a loan using amortization.

Loan payments are driven by three things: principal, interest rate, and term. Amortization spreads principal repayment over time, so early payments are interest-heavy.

This calculator computes the standard fixed-rate monthly payment and summarizes interest cost over the full term.

Prefer an explanation- Read the guide.
Related definitions:apramortizationprincipalinterest rate
Loan amortization: how monthly payments and total interest workCapital budgeting hub: NPV, IRR, payback, and investment decisionsInterest expense: definition, formula, and how to calculateAPR vs APY: how compounding changes the effective rate
 
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Tip: you can type commas (e.g., 10,000).

Example

Using the default inputs, the result is:
$1,896.20
Loan principal
$300,000
APR
6.5%
Term (years)
30

How to calculate

  1. Enter loan amount (principal), APR, and term in years.
  2. Review monthly payment, total interest, and total paid.
  3. Use it to compare refinance scenarios or affordability.

Formula

Payment = Pxrx(1+r)^n / ((1+r)^n - 1) where r is monthly rate and n is months (for r>0)
  • Fixed-rate, fully amortizing loan with constant monthly payments.
  • Does not include taxes, insurance, or extra fees.
  • APR is treated as nominal annual rate divided by 12 for monthly rate.

FAQ

Why is total interest so high on long terms-
Because interest accrues on outstanding principal over many months. Longer terms reduce payment but increase total interest paid.
What if I make extra payments-
Extra principal payments reduce outstanding balance faster, lowering total interest and shortening term. This calculator assumes no extra payments.

Common mistakes

  • Mixing APR and monthly rate incorrectly (use APR/12).
  • Ignoring fees and points (APR may not capture all costs).
  • Assuming all loans amortize the same (interest-only, balloon loans differ).

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Quick checks

  • Use consistent time units (monthly vs annual) when entering rates and cash flows.
  • Run a sensitivity check on the input that drives the result most (often discount rate or growth).
  • Treat the output as a decision aid, not a prediction; validate assumptions with reality.